California continued to amble along in July with a
slightly better employment picture. The public sector still appears to be carrying
the load however. Construction and real estate activity continued to slow from
last years pace.
- With the addition of 7,500 industry jobs in
July, California has created an average of 1,500 nonfarm jobs each month of
2002a total of 10,200. This is much better than the 2,200 jobs lost
on average each month during 2001.
- Government and wholesale and retail trade were
the only two job-gaining major industries in July. Government payrolls advanced
for the tenth consecutive month with the addition of 24,000 jobs, which means
that private sector employment dropped by over 16,000. Nearly all of the public
sector gains came from local public schools. Seasonal adjustment factors may
well be at work, as local government employment was unchanged in Junethe
first time in nine months that it has not grown. During July local governments
added 19,100 jobs.
- Wholesale and retail trade industries turned
in their second consecutive month-over-month advance in July with the addition
of 6,100 jobs. Retail trade added 4,300 jobs led by eating and drinking places.
Wholesale trade added 1,800 jobs.
- Losses in electronics made manufacturing the
leading job loser in Julydropping 9,900 jobs for its 18th consecutive
month-over-month loss. Stagnating building activity led construction industries
to shed 4,300 jobs in July.
- Compared to a year ago, industry employment
in California was down 35,500 (or 0.2 percent) in July. Continuing
weakness in the high technology sector led manufacturing employment to fall
by 83,000 over the year. Transportation and public utilities lost over 30,000
- Government was again the year-over-year job
growth leader. Since July 2001, the public sector has added nearly 74,800
jobs, with the great majority in local public schools.
- California's unemployment rate dropped to 6.3
percent in July from a revised 6.5 percent in June. The
improvement resulted from a drop in the number of unemployed persons (46,000)
and increased civilian employment (55,000).
- Following a burst of activity early in the year,
construction in California has slowed significantly and trails last years
pace. Residential construction, as measured by permitting activity, reached
a seasonally adjusted, annual rate of 135,000 units in June, a 2 percent
drop from a year ago. For the first six months of 2002 as a whole, residential
construction was essentially unchanged from the same months of 2001. Regionally,
home building has fallen dramatically in Los Angeles, San Diego, and the San
Francisco Bay areas.
- Nonresidential construction in June, as measured
by permit values, was off over 14 percent from a year ago. The
slowdown is still being led by dramatic reductions in office building and
- Following surging sales in April and May, statewide
sales of single-family homes plunged almost 14 percent in June.
This represents a small 1.4 percent year-over-year gain, but
is a significant reduction from the 20+ percent gains made in
both of the preceding two months. Despite this drop in demand, the median
price of single-family homes sold in June, $324,000, was still 21.5
percent above the median reached a year ago.
Home Sales Slow
Monthly Cash Report
General Fund agency cash for July was $42 million below the 2002-03
May Revision forecast of $3.859 billion.
- Personal income tax revenues
were $63 million below the months forecast of $2.078
billion. Withholding was $56 million below the months
estimate of $2.005 billion, and refunds were $53 million
above the expected level of $102 million. This shortfall was
partially offset by other receipts, which were $46 million above
the $175 million that was projected.
- Sales and use tax receipts
were $88 million above the months forecast of $1.368
billion. July represents the final payment for second quarter taxable
sales, which was due on July 31 and a portion of this payment is received
in early August. A more complete picture of second quarter sales will be available
in mid-August, when all of the second quarter receipts have been processed.
The May and June prepayments were $258 million below forecast.
To date, it appears that a portion of this shortfall may be offset in the
- Corporation tax revenues
were $48 million below the months estimate of $213
million. Prepayments were $7 million above the estimate
of $145 million. Other paymentswhich include final payments
and other miscellaneous paymentswere $27 million below
the forecast of $112 million. Refunds were $28 million
above the projected level of $44 million.
- Revenues from the insurance,
estate, alcoholic beverage, and tobacco taxes came in $6 million
above the $138 million that was expected. The remaining revenuespooled
money interest income and other revenueswere $25 million
below the months estimate of $62 million.
General Fund Agency Cash
2002-03 May Revision Forecast
2002-03 Comparison of Actual and May Revision
Forecast Agency General Fund Revenues
For more information, please contact the
California Department of Finance,
Room 1145, State Capitol, Sacramento, CA or call (916) 323-0648.
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